Question(s) / Instruction(s):

A company sold $13,000 worth of trampolines with an extended warranty. It estimates that 1% of these sales will result in warranty work. The company should: a. Consider the warranty expense a remote liability since the rate is only 1% b. Recognize warranty expense at the time the warranty work is performed c. Recognize warranty expense and liability in the year of the sale d. Consider the warranty expense a contingent liability e. Recognize warranty liability when the company purchases the trampolines